Intangible amortization, Palmiero buy a patent from Vania

Intangible amortization

Reference no: EM1346583

a) Palmiero purchased a patent from Vania Co. for $1,500,000 on January 1, 2010. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2010. During 2012, Palmeiro determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2012?

b) Palmiero bought a franchise from Dougherty Co. on January 1, 2011, for $350,000. The carrying amount of the franchise on Dougherty's books on January 1, 2011 was $500,000. The franchise agreement had an estimated useful life of 30 years. Because Palmiero must enter a competitive bidding at the end of 2020, it is unlikely that the franhchise will be retained beyond 2020. What amount should be amortized for the year ended December 31, 2012?

c) On January 1, 2010, Palmiero incurred organization costs of $275,000. What amount of organization expense should be reported in 2012?

d) Palmiero purchased the license for distribution of a popular consumer product on January 1, 2012, for $150,000. It is expected that this product will generate cash flows for an indefinite period of time. The license has an initial term of 5 years but by paying a nominal fee, Palmiero can renew the license indefinitely for successive 5-year terms. What amount should be amortized for the year ended December 31, 2012?

Reference no: EM1346583

Questions Cloud

Explain how much tax does the company owe : ABC Company earned $673,411 in taxable income for the year. Explain how much tax does the company owe on this income?

Show managerial accounting information : Explain which one of the reports serves as the primary communication of audit findings

Give the frequency of the fundamental : A 110 g cube of ice at 0°C is dropped into 1 kg of water that was originally at 90°C. What is an final temperature of the water after the ice has melted.

Question about cross-cultural communication matrix : Question about Cross-Cultural Communication Matrix - Select three regions of the world to research by clicking on the map. Select one country from each of the three regions you selected to research.

Intangible amortization : Palmiero buy a patent from Vania Corporation for dollar 1,500,000 on January 1, 2010. The patent is being amortized over remaining life of ten years, expiring on January 1, 2010.

Define the factors that caused the organization to embody : Describe how you determined that the selected organization showed the signs of the culture that you have identified. Define the factors that caused the organization to embody this particular culture.

Find the maximum distance stars could be from the earth : A scientific supply catalog advertises a material having the index of refraction of 0.85. Is that a better product to buy? Why or why not.

Explain differential dividend growth model : Differential Dividend Growth Model - Combined Communications is a new firm in a rapidly growing industry.

Public relations communication process : Public Relations Communication Process - Explain what is the significance of the communication process in PR and what types of interference might a PR professional experience in the communication process

User Account

All Pages